Debt-ridden Vi’s shareholders okay Rs 20K cr equity fundraise

The company’s board will next meet on April 6 to consider and approve the proposal for the issuance of equity shares or convertible securities on a preferential basis.

If the company is successful in raising funds through the equity route, that would bring down the promoter shareholding in the telco to around 40 per cent from the current 49 per cent. The government is the largest shareholder in the beleaguered telco after it had converted around Rs 16,000 crore in regulatory dues owed by the company into equity for a stake of around 33 per cent last year.

For Vi, raising funds will be a crucial venture as it faces stiff competition from rivals Reliance Jio and Bharti Airtel, and continues to lose 4G subscribers to the two operators. The company, despite having secured airwaves in the 5G spectrum auctions, has also been unable to roll

out the service as it struggles to manage its debt and expand services. Both Jio and Airtel have stolen a march over Vi in 5G coverage in India.

The fundraise is also important for the company because once the moratorium on regulatory dues expires in financial year 2026, Vi would need to pay the government around Rs 28,000 crore. From the next financial year onwards, Vi’s dues to the government will be over Rs 41,000 crore.

“As part of the reforms package, the government had announced that post the moratorium, if the company needs support they will be looking at or willing to convert the deferred series of instalments into equity at their option,” Akshaya Moondra, Vi’s CEO said while addressing the company’s extraordinary general meeting.

The company had recently issued equity shares to its vendor American Tower Company (ATC) through conversion of optionally convertible debentures (OCDs) worth Rs 1,440 crore. ATC now holds 2.87 per cent stake in Vodafone Idea.

Vi managed to trim its net loss for the December quarter to Rs 6,986 crore from Rs 8,738 crore in the preceding quarter. Revenue from operations rose 0.5 per cent year-on-year, owing to improvement in subscriber mix, 4G subscriber additions and increase in entry level tariffs.

The company’s scrip was trading at Rs 13.55 at the time of market close on Wednesday.